Airlines expect profits to jump to record high

Associated Press

Updated 4:38 pm, Thursday, December 12, 2013

Photo: Anja Niedringhaus

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FILE - In this May 19, 2008 file photo, security guards watch planes lined up outside the Geneva Palexpo prior to the upcoming European Business Aviation Convention & Exhibition, EBACE, in Geneva, Switzerland. The global airline industry expects its profits to jump to a record high next year, helped by falling jet fuel prices, rising travel demand and cost-cutting. The International Air Transport Association, IATA, said Thursday, Dec. 12, 2013 it forecasts a profit of US dollar 19.7 billion  well above the US dollar 12.9 billion expected this year and the US dollar 7.4 billion made in 2012. (AP Photo/Anja Niedringhaus, file) ORG XMIT: LGL101 less

FILE - In this May 19, 2008 file photo, security guards watch planes lined up outside the Geneva Palexpo prior to the upcoming European Business Aviation Convention & Exhibition, EBACE, in Geneva, Switzerland. ... more

Photo: Anja Niedringhaus

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FILE - In this March 20, 2012 file photo Tony Tyler, Director General and CEO of the International Air Transport Association, IATA, speaks during a press conference in Geneva, Switzerland. The global airline industry expects its profits to jump to a record high next year, helped by falling jet fuel prices, rising travel demand and cost-cutting. The International Air Transport Association, IATA, said Thursday, Dec. 12, 2013 it forecasts a profit of US dollar 19.7 billion  well above the US dollar 12.9 billion expected this year and the US dollar 7.4 billion made in 2012. Tyler said that the profit would amount to a little less than US dollar 6 per passenger. (AP Photo/Keystone, Salvatore Di Nolfi, File) ORG XMIT: LGL102 less

FILE - In this March 20, 2012 file photo Tony Tyler, Director General and CEO of the International Air Transport Association, IATA, speaks during a press conference in Geneva, Switzerland. The global airline ... more

Photo: Salvatore Di Nolfi

Airlines expect profits to jump to record high

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GENEVA — The global airline industry expects its profits to jump to a record high next year, helped by falling jet fuel prices, rising travel demand and cost-cutting.

But the Geneva-based group, which represents 240 airlines, or 84 percent of total air traffic, noted margins are dropping. Next year's profit would come from projected revenues of $743 billion. By contrast, 2010's $19.2 billion profit was made on revenues of just $579 billion.

Tony Tyler, director-general and CEO of IATA, said that the profit would amount to a little less than $6 per passenger.

"To put that into perspective, the McDonald's down the road here in Geneva will make about the same amount of profit by selling four Happy Meals," Tyler told reporters.

"It begs the question of whether $6 per passenger is a reasonable reward for airlines if you consider the technology, skills and capital that is invested," he said.

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Passenger traffic has been expanding by about 5-6 percent and jet fuel prices remain high, but below their 2012 peak, Tyler said. The $12.9 billion net profit the industry expects for 2013, based on $708 billion in revenue, is itself a significant improvement on the group's earlier forecasts.